Australia's Energy Commodity Resources 2025 Hydrogen

The Australian Government released the 2024 National Hydrogen Strategy in September 2024 and provides a thorough update of the former Hydrogen Strategy published in 2019. This new strategy focusses on the growth of a clean hydrogen industry and aims to position Australia as a global leader in the production, use and export of hydrogen derivatives such as ammonia and hydrogen-imbedded products such as green iron. There is increasing focus on hard-to-abate sectors of the economy such as iron, alumina, fertilizers, heavy road freight and long-haul transport (e.g. aviation and shipping). These industries are currently heavily reliant on fossil fuels and cannot be easily electrified.

A key component of the updated Strategy is the introduction of production incentives under the Government's Future Made in Australia plan, announced in the 2024–25 Federal Budget. These incentives, including the Hydrogen Production Tax Incentive (HPTI) and the expanded Hydrogen Headstart Program, are designed to accelerate investment, promote economies of scale and reduce the cost gap for renewable hydrogen.

Australia is well placed to become a major hydrogen producer for both domestic consumption and export. Australia has significant capacity for renewable energy generation, as well as abundant identified resources of natural gas and coal, and potential large-scale geological storage sites for any co-produced CO₂. While most projects underway are still in the feasibility or engineering stages, a few hydrogen projects with capacities greater than 10 MW are progressing into construction, with production expected to commence in 2025 and 2026 (CSIRO, 2025).

• Investment from Australian state/territory and federal governments is increasing, with $17.5 billion of committed hydrogen specific support and $42.8 billion of hydrogen eligible support through a range of programs, including the National Reconstruction Fund (CSIRO, 2024; DCCEEW, 2024).

Geoscience Australia provides open access to datasets and digital tools to assist governments and industry assess Australia’s hydrogen potential. The Hydrogen Economic Fairways Tool (HEFT), released in 2021, conducts detailed geospatial-economic analysis of future large-scale hydrogen projects and considers hydrogen produced by renewable energy and from fossil fuels with CCS. This supports policymakers and investors in their decision making regarding the location of new infrastructure and the suitability of various regions for hydrogen production.

Storage infrastructure is essential to enable hydrogen to be produced and stored during periods of low demand, then supplied during periods of high consumption. Small quantities of hydrogen can be stored in pipelines or tanks above ground. Large-scale storage of hydrogen occurs in subsurface salt caverns (Figure 7.2), although there is potential for storage in depleted gas fields or lined, mined hard rock caverns. Geoscience Australia has mapped the known distribution of thick underground rock salt accumulations (Figure 7.3, Figure 7.4; Bradshaw et al., 2023). Regions with thick salt that may be prospective for salt cavern construction include the Adavale Basin, the Amadeus Basin, the Polda Basin and the Bonaparte Basin offshore Northern Territory. Parts of the Canning and Officer basins may also contain suitable salt (Figure 7.3, Figure 7.4). Geoscience Australia is undertaking further work under the Resourcing Australia’s Prosperity initiative to assess the most suitable storage options for large scale hydrogen.